Investor Margin Debt Surges 40% Since April Lows, Fueling Stock Market Rally
Margin loans used to purchase high-growth stocks like Nvidia (NVDA), Tesla (TSLA), and Palantir (PLTR) have climbed 40% since the market bottomed in April, according to FINRA data. Total margin debt reached $1.18 trillion in October, up from $850 billion during April's tariff-driven selloff.
The surge in leverage coincides with an 87% rebound in the S&P 500 since its April 8 low. Historically, such spikes in margin debt have preceded major market downturns, including the crashes of 1929 and 2000. Retail investors appear particularly active, borrowing heavily to chase the tech-led rally.